Malphurs

FastCompany tends to go to extremes, but their article, “The Great App Bubble” contains some great insight into mobile app industry:

So, the question remains: App or Mobile-Optimization?

The answer certainly depends on the type of information, intended functionality, available budget, and target audience involved. But, Fast Company’s list of “eight signs we are in an app bubble” certainly will make you look twice. The highlights of the list include:

• Developers are not seeing profits:
  Paid apps average $4,444.00 in earnings (but a median of only $682.00 per year). The average cost to build an app is $35,000.00. (source)
• Apple isn’t either:
  The App Store’s profits amount to only 1% of the company’s profits. The primary purpose of the store is to simply drive users to Apple’s “iDevices”. (source)
• iPhone users don’t value apps:
  Most users simply want to see what an app can do. The statistics from Pinch Media are surprising: 
  • Only 20 percent of consumers utilize a free app the day after they download it.
  • By 30 days out, less than 5 percent of consumers are still using it.
  • Paid apps hit a steep drop in usage within 11 days. (source)
• Organizations are ignoring their mobile sites:
  Research done by Ahonen and Moore shows that an app’s development cost is 10 times more than that of a mobile site, yet its reach is 50 times worse.
• Venture Capitalists are throwing money at apps:
  Remember the “dotcom bubble”? Remember when it burst? We are seeing venture capitalists making the same mistakes all over again… Kleiner Perkins Caufield & Byers has set aside $200 million to invest in apps, while other such VCs are spending much of their money focusing only on app development. That’s a lot of eggs in one basket. (source)
• The app marketplace is flooded – part 1:
  There are currently 225,000 apps available, with 15,000 apps being submitted each week. If you plan to build an app, your competition is stiff.
• The app marketplace is flooded – part 2:
  Again, there are currently 225,000 apps available, with 15,000 apps being submitted each week. If you need to find something, why not use a browser?

Will apps go away? Of course not. Just like after the “dotcom” bubble burst, the industry will even out. After all, websites certainly didn’t go away. However, apps must get cheaper to produce and developers need to manage their income expectations. Organizations should begin focusing more on mobile sites that are relatively inexpensive and less on apps that are both costly and limited in their reach.